Wednesday, December 7, 2011

Pressure from default of European countries

From class, we learned the bank panic was one of the factors that led to Great Depression along with Stock Market Crash. Similar to what happened in the world today, as the European countries has high risk of default, people start to panic. Business reduced investment, people are worried about the effect of them defaulting to the world, consumption decreased and etc. Luckily, we do not have gold standard anymore to bring us into worse situation. The European countries had also came up with a lot of reform and proposals to stimulate the economy and reduce the debt to prevent the risk of default.

Occupy Wall Street

US has continuously suffered from income inequality. As the economy boomed, the demand of high skilled workers (particularly in financial and technology sector) has been increasing which led to the high price of skills. and thus, higher income inequality.

Hong Kong Income Inequality

The income inequality in Hong Kong has been more and more serious as the income growth for rich people outweighed the poor. By using the overall Gini coefficient as measurement, we can see that it is the highest since the figures were recorded. 30 years ago, Hong Kong experienced high income mobility as the manufacturing industry prospered. Many people who moved from category 1 to 5 were not due to high education background. However, Hong Kong has transited to financial sector which high education background is needed to succeed.

The wealth gap between the rich and poor has widened further with the overall Gini coefficient, representing income disparity, at its highest since the figures were recorded.

Citi Plans to Layoff Thousands

In a recent article by CNNMoney, Citigroup will lay off 4,500 employees over the next few quarters. The current unemployment rate in the U.S. is 8.6%, which is better than the recent market trend but is still higher than the history average of 6%. Hopefully this will not decrease it any further and cause a slowing of our economy, as consumption will also decrease.

Great merger Movement

AT&T and t-mobile merger was not allowed by government because government thought that if these two large company comes together than they can control the whole cell-phone market and limit the price so that no other company can come in or make profit. This merger was similar to the great merger movement (1895-1905).

Big Issue Over Student's Hanging of Confederate Flag

In an article by CNN, a college student at the University of South Carolina Beaufort named Byron Thomas hung a Confederate flag in his dorm. After numerous complaints from those passing by the commons, he was asked to take the flag down. Thomas, a black student, asserts that the flag stands for something other than division and racism. He believes it was given this negative stigma from groups like the KKK. The fact that this story is being aired exhibits the lasting sentiments from the slave era.
US unemployment has decreased to 8.6% but, it is still above the national historic average of 6% (Sobhana Chandra). This might be caused by hiring led by large retail store especially for November-December holiday shopping.